McDonalds’ “Innovate Project” failure

McDonalds’ “Innovate Project” failure
Most companies don’t like to reveal their failures of IT project management, but they would learn an important lesson by analyzing their project failures.

History
“Innovate Project” was one of the most expensive and extensive information technology projects. This project aimed to create a real-time global network to link over thirty thousand stores in 121 countries to headquarter by Intranet. This system would collect real time information from every store and then deliver it to the headquarters’ executives.
This information would enable headquarters’ store manager and executives to effectively and consistently manage and operate their stores moment by moment.
Innovate project started in 1999 with a budget of $1 billion and a five-year plant. In late 2002, McDonald's cancelled Innovate. The $170 million that had already been spent for the Innovate project was lost and between 100 and 200 contractors and McDonald's employees working on the project might be dismissed or reassigned.

Mistakes and comments
Scope Management
In the stage of initial analysis, the project management might not carefully consider whether or not the project had the right scope and the project could address the current issues.
Establishing a real time global network to cover all locations was impossible from the beginning, because individual countries had different IT infrastructures.
Project scope should have been defined more in detail to identify viability of project.
Stakeholder Involvement
To identify project feasibility and define its scope, sufficient information and feedback from store managers in each country should have been given. Project team should have identified whether or not they could address current challenges through the feedback.
Project Manager
It’s very important to have a qualified and experienced project manager in the project such as this. If a company had had a skilled project manager, project manager would have told executives that Innovate Project was impossible, illustrating the need to examine the project feasibility thoroughly from the beginning.
Executives Understanding
They understood the importance of Innovate Project to improve daily operation management but did not have sufficient understanding of IT technology and had unrealistic expectations...

Conclusion
The failure of McDonalds’ Innovate Project clearly illustrates that project scope management is necessary to complete the project successfully. Project team and executives should have sufficient understanding of the project and its scope should be well-defined in order to deliver a valuable product within the expected time frame and budget.

Reference:McDonalds: McBusted–‘TURNS AND RETURNS’ by Larry Barrett, retrieved October 31, 2008 from baseline website: http://www.baselinemag.com/c/a/Projects-Supply-Chain/McDonalds-McBusted/3/